Smartphone trade-ins have become cottage industry for savvy tech fans

Mark Fawcett of St. Paul sells his iPhone on Craigslist every year just before Apple unveils a new model. He bought an iPhone 5S for $399 Friday after selling his iPhone 5 for $575. (Pioneer Press: John
Autey)

Fawcett is part of a booming cottage industry catering to the demand for used iPhones and other popular mobile devices, in turn fueled by others' lust for the new and shiny.

As a result, those wanting to get a good price on their recent-model devices have a growing number of options, including eBay and Craigslist.

The transaction time can come with some inconvenience, though. Fawcett, accustomed to the latest and greatest, had to rely on a 4-year-old iPhone 3GS for about three weeks after his iPhone 5 was gone.

"Switching back to a slow, old phone isn't all that much fun" while waiting for the new models to arrive, he said. "But it's well worth it."

Those seeking more instant gratification can simply go to the store -- just about any store that sells electronic devices.

Tech retailers and wireless carriers are fueling an explosion of trade-in programs -- all designed to help you not have to pay, or at least not pay as much, for your new phone.

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Richfield-based Best Buy, for instance, offers one of the colorful new iPhone 5C models at no cost to anyone who brings in an iPhone 4 or iPhone 4S, and meets certain other conditions.

Minneapolis-based Target allows trade-ins in its stores and online in a program managed by NextWorth. It takes phones, tablets, MP3 players, laptops and more.

Target also offers a 20-percent discount on an entry-level iPhone iPhone 5C, pricing it at $79 instead of $99.

Others, including GameStop, Amazon.com and Wal-Mart offer trade-ins, too. Wal-Mart was recently quoting up to $300 for an iPhone 5 and up to $175 for a Samsung Galaxy S III -- as long as they're undamaged.

Apple this year began offering iPhone trade-ins at its retail stores, with all credits going to the purchase of new iPhones. It had already offered online trade-ins.

Microsoft, which has seen poor sales of its Surface tablet at its retail stores, has countered with a trade-in program covering a gamut of devices, including Apple phones and tablets.

On Friday, Joe Alvarado went the Apple store route after one of the local retail outlets offered him $253 for his iPhone 5. That gave him only $46 for an iPhone 5S.

The University of Minnesota staffer said he was offered $325 on Apple's site a few days earlier, but he didn't want to be without a phone while sending out his old handset and awaiting delivery of the new one. Dealing with a local store was just more convenient, so he was willing to take the financial hit, he said.

These newer retail trade-in programs are competing with veterans in this market, including the popular Gazelle. The Boston company used to take in a wide assortment of devices but has lately focused on the top smartphones and tablets along with Apple Macintosh computers.

Gazelle quotes are typically good for 30 days, but an iPhone promotion "locks" the price in place through Oct. 31.

With competition for trade-ins intensifying, some businesses are getting creative.

EcoATM kiosks have popped up in Twin Cities malls to take old phones on the spot and, in some cases, spit out money in return. An EcoATM in Maplewood Mall this week paid $35 for a working 2010 HTC Desire HD smartphone, for instance, but nothing for an assortment of older flip phones.

The EcoATMs are mostly automated, but humans check ID via a built-in webcam to prevent thieves from snatching phones and trying to sell them at the kiosks.

But if they're not dealing with a private party, those looking into trade-ins have to read the fine print, said Nik Raman, chief operating officer at uSell.com, which takes phones, tablets and other tech products.

Apple, for instance, doesn't pay cash and will not accept water-damaged handsets. Cracked screens, however, are OK.

Trade-in services offered by carriers and retailers "are fine, convenience-wise, but ultimately, at the end, the user will still get the shorter end," said Archie Mariano, whose eCycleBest service gives quotes on electronics, including laptops, phones and tablets.

Those with the time and initiative will often get good results on Craigslist and eBay, too, Mariano added.

Fawcett, of St. Paul, has always sold his iPhones on Craigslist and said he waits patiently for an acceptable offer.

He said those trying to sell their iPhones now are too late -- at least if they want the best possible price. He timed his sale to happen just before Apple announcing the iPhone 5S and iPhone 5C on Sept. 10, thereby avoiding a stampede of sellers and commanding a better price.

With his new iPhone financing in place, Fawcett on Thursday repeated a yearly ritual: camping overnight at Rosedale Center's Apple store.

"Getting my geek on," he said on Facebook on Thursday night. "First in line again."

On Friday morning, as Apple employees did their usual countdown to the store opening, Fawcett got the surprise of his life: Workers hoisted a "Welcome back, Mark" placard, shouted their welcome for good measure and even hugged him.

"It was amazing," said Fawcett, who took home the 64-gigabyte iPhone 5S. "I was so honored."